It's a perk for drivers and a cheap signal for carriers
With carriers continually looking for ways to entice and keep good drivers, another perk is on the way: digital satellite radio.
Not only will it be a boon to drivers, but companies themselves could see benefits with the relatively inexpensive service that promises nationwide coverage with no gaps and no signal dropouts. If it works as planned, drivers could start listening to a radio station in New York and hear it all the way to Los Angeles. They could also be receiving information from dispatchers at the same time.
The system relies on satellites that continuously beam signals to specially equipped radios. Antennas are about the size and shape of a pen. In some locations, such as cities with tall buildings, auxiliary land-based stations will reach areas that the satellite can't see. Because the system is digital, not analog, many different programs can be crammed into one signal so it can include music, talk, and even information destined for in-cab computers. About 100 channels of programming will be offered.
Although the idea of satellite radio was originally conceived for automobile drivers who craved more music channels with CD-quality sound, there will be a large constituency of special listeners as well. "We expect a strong acceptance level from commercial drivers," says Dan Murphy, vp-retail marketing and distribution for Washington, D.C.-based XM Satellite Radio, one of two companies licensed by the Federal Communications Commission (FCC) to offer the service.
The economies of satellite radio differ greatly from traditional broadcast radio, which relies on reaching a large demographic group within a small geographic area and paying for itself with advertising.
Because satellite radio can be beamed nationwide, it can become profitable to transmit programs to a constituency that is thinly spread around the country but large in total number - such as truck drivers. According to Murphy, programming can be sent on a fleet-specific, geographic-specific, even a driver-specific level by changing the settings on the receivers.
For example, truck drivers in Florida could set their radios to receive the latest updates about hurricanes or a driver in Ohio could hear information about local traffic tie-ups and alternative routes.
Receivers will range in price from $250 to $500, depending on features and whether they stand alone or hook up to the current radio and speakers. The radios themselves will display the channel number, type of music, artist, and program title. A listener can choose to hear a particular program or ask for all jazz stations and then choose among the offerings. Aside from the cost of the receiver, the service will cost $9.95 a month.
The second company offering this service is Sirius Satellite Radio in New York City. Although the technology is similar (Sirius will use three satellites; XM will use two), the programming will set the companies apart. Each company promises about 100 channels, but Murphy says the mix between commercial and commercial-free programming has not yet been determined. Terrence Sweeney, vp-marketing for Sirius, said it plans to have 50 channels devoted entirely to commercial-free programming. "Our programming will be developed around the listener; we can change format overnight if necessary to respond to audience desires."
Each company is working with radio manufacturers and vehicle makers. Freightliner, through parent DaimlerChrysler, has penned an agreement with Sirius to be the first truck maker to install its radios in commercial vehicles. In addition, Freightliner has agreed to install XM radios in its trucks in conjunction with Freightliner's Truck Productivity Computer, which will to include a weather band radio, compact disk player, GPS system, and a communications interface for cellular and internet access.
Sirius plans to have its network begin broadcasting by year's end. XM officials say they will be ready to hit the airwaves by first-quarter 2001. An interesting wrinkle is that the first radios to hit the market will be company specific. That is, an XM radio can only receive XM transmissions and the same for those from Sirius. After this first generation of equipment has been sold, the new radios will be interchangeable, with one radio able to receive both services (for two separate fees, of course).
The FCC, which believes there's room for two satellite radio services, auctioned off licenses to Sirius ($83 million) and XM (almost $90 million). With additional satellite and infrastructure bringing start up costs to more than $1-billion each, these companies are banking on a lot of people listening in.